No. 82-257 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1983 

JOHN R. MOBLEY, DELORES W. MOBLEX, 

and MOBLEY LAND, INC., a corporation, 

Plaintiff and Appellant, 

NEWMAN R. HALL, MARJORIE A. HALL, 

EASTERN BROKERAGE SERVICE, AL "BUCK" 

MURI and ED KIMBALL, 

Defendants and Respondenis. 

Appeal from: District Court of the Sixteenth Judicial District, 

In and for the County of Custer 

Honorable A. B. Martin, Judge presiding. 

Counsel of Record: 

For Appellant: 

Gene Huntley, Baker, Montana 

For Respondents: 

Lucas and Monaghan, Miles City, Montana 

Thomas Monaghan, Miles City, Montana 

Submitted on briefs: November 5, 1982 

Decided: January 20, 1983 

Filed: JAN 2 o 1983 
Mr. Justice John C. Sheehy delivered the Opinion of the Court. 

This is an appeal from an order of the District Court of the 

Sixteenth Judicial District, Custer County, granting defendants' motion 

for sunranary judgment on the ground that plaintiffs' claim was barred by 

the statute of limitations. We affirm the order of the District Court 

and remand the case for further consideration. 

On Novemkr 3, 1975, defendants, Newman and Marjorie Hall, entered 

into a listing agreement with defendants Eastern Brokerage Service 

(Eastern) and FA Kimball, Eastern's agent. The Halls told Kimba.11 that 

the cattle ranch they wished to sell included approximately 470 acres of 

winter wheat and smr fallowed cropland, 700 acres of intemdiate 

wheat grass and 360 acres of diked alfalfa with a total of 400 acres of 

developed dikes. In his deposition Mr. Hall stated that these figures 

were based on crop yield and information he received from his seller when 

he purchased the land in 1956. 

Based on these representations, Eastern printed and distributed a 

brochure that detailed the crop acreage. Mr. Hall told both Mr. Mobley, 

plaintiff, and Eastern that the figures were approximate but the brochure 

did not indicate that they were. 

Mr. Wbley contacted Eastern and was advised by defendant Al Muri, 

Eastern's agent, that the Hall property was for sale. Hall received a 

brochure and requested official naps of the property. He did not receive 

complete maps of the property at the time of the sale because no such 

maps existed. Halls left partial maps of the alfalfa crop only, i.n the 

residence sold to the Mobleys. These maps shmed that Mr. Hall had 

miscalculated the alfalfa crop and had overstated the crop acreage by at 

least 115.6 acres. Mr. Hall testified that these maps were delivered to 

Mr. Mobley before the sale. 

On March 29, 1976, the Mnbleys signed a contract for deed for the 

purchase of the ranch lands. The contract provided that there were 
"4,179.19 acres, more or less," but did not expressly set forth +he exact 

acreage for each type of land. 

Mr. Mobley began planting grain in April of 1976. At this tine his 

drill acreage measuremnt device did not correspond with the acreage 

shown on Eastern's brochure but Mr. Hall assured him that the acreage 

specified was correct. In the fall of 1976, Mr. Mobley sumner fallowed, 

this time he used a borrmed drill. Again the drill masur~ment did not 

correspond with the acreage listed on the brochure. 

In June of 1977, Mr. Mobley asked the Agriculture Soil Conservation 

Service (ASC) to take acreage masurements. On June 28, 1977, the ACS 

responded: 

"Enclosed find a copy of the fields you drew in 

yesterday. We only came up with 336.8 acres of 

wheat--164.5 acres of barley plus 405.4 acres of 

summer fallow. Do you think samething is wrong? 

It is short of your estimate. 

Dot Nalley" 

On August 29, 1977, 1W. Mobley paid the ASC $46.81 for acreage 

measurements. He received a masurement service record detailing the 

costs. The record indicated that there were 438.9 acres of wheat, 188.3 

acres of barley and 393.0 acres of summer fallow. With another check 

dated November 29, 1977, Mrs. Mobley paid the ASC $15.00 for additional 

field measuring. 

The ASC aerial survey was ccgnpleted November 1, 1977. This survey 

showed that there were 386.1 acres of winter wheat and sunmer fallowed 

cropland not 470; 434.4 acres of intemiate wheat grass not 700 

acres; 244 acres of diked alfalfa not 360 and 364.9 acres of developed 

dikes not 400 acres as represemted on Eastern's brochure. 

After the survey was completed Mr. Mobley called Eastern and 

discussed. the discrepancy with Ed Kimball. Kimball told Mr. Mobley to 

wait until spring when the snow was off the ground, and that if there 
were any shortages they could be determined at that time and that Hall 

would "make it right. " 

In the spring of 1978, Kimball and Hall did go to the Mobley 

ranch. They looked at the ASC maps and inspected the property. In May 

of 1978, Kimball and Hall met with Mr. Mobley and refused to make any 

adjustments in the purchase price because they felt the land was sold in 

gross as a cattle ranch. 

On October 18, 1979, the Mobleys filed a complaint in the District 

Court seeking $100,000 in actual damages and $150,000 in punitive 

damages for fraud based on the overstatemnt of cropland. On Julv 17, 

1981, the Mobleys suhnitted to the District Court a mtion for partial 

surmnary judgment on the issue of liability against the Halls. On March 

31, 1982, the defendants moved for sumnary judgment claiming that the 

Mobleys' action was barred by the two year statute of limitations for 

actions based on fraud. 

Section 27-2-203, MCA, provides: 

"Actions for relief on ground of fraud or mistake. 

The period prescribed for the commencement of an action 

for relief on the ground of fraud or mistake is within 

2 years, the cause of action in such case not to be 

deemed to have accrued until the discovery by the 

aggrieved party of the facts constituting the fraud or 

mistake. " 

Mobleys contend that they fall within the discovery exception and 

that the alleged fraud was not discovered by them until the survey was 

completed on November 1, 1977, within two Years of the filing of the 

action. 

The defendants' mtion was argued orally and the District Court 

entered its memorandum and order granting defendants' motion on May 24, 

1982. The summary judgment was entered on May 26, 1982. The clerk of 

court served notice of entry of judgment on May 26, 1982. The Mobleys 

served their motion for new trial and affidavit in support of motion for 

new trial on June 9, 1982. The Mobleys did not notice their motion for 

new txial at the tine it was served but secured an order from another 
District Court judge continuing the hearing. Mobleys' counsel filed 

notice of appeal on June 24, 1982. 

In its memorandum and order, the District Court outlined the 

circumstances pertaining to the Halls' suspicion, knowledge or discovery 

of acreage shortages. 

1. Plaintiffs (Mobleys) discovered an acreage shortage when they 

drilled the fields in the spring of 1976. 

2. Plaintiffs discovered or suspected shortage of intermediate 

wheat grass in 1976. 

3. Plaintiffs discussed with Hall in 1976 his concern about an 

acreage shortage in three fields comprising more than one-half of the 

acreage of cropland. 

4. Plaintiffs found ASC maps in the ranch house shortly after 

taking possession in 1976 showing acreage of cropland. 

5. In the spring of 1977, plaintiff requested an acreage 

measurement which was furnished and paid for by the ASC on or before 

August 29, 1977, showing an acreage shortage. Plaintiff then requested 

measurement of intermediate wheat grass which was furnished on November 

1, 1977. 

In response, Mobleys assert that circumstances nuhers 1 and 2 

cannot be called discovery, within the meaning of the statute, because 

for at least one of the masuremnts, Mobley used a borrowed drill acre 

device and that Mr. Hall reassured Mr. Mobley that Hall's drill device 

had shm the fields as represented. Mobleys state that circumstance 

n&r 3 is not supported by the record and is not determinative of 

whether discovery had been made; that it was Mr. Mobley who contacted Mr. 

Hall and not the "plaintj.ffs;" that Mr. Hall reassured Mr. Mobley and 

allayed his fears and that the acreage shortage is nowhere near one-half 

but is 5 percent- of the acres purchased or 18 percent of the improved 

acreage. With regard to circumstance no. 4, Mobleys assert that the ASC 

maps were outdated, incomplete and unreliable rendering them virtually 
useless in calculating the acreage of tillable cropland. Furthermore, 

with regard to ciramtance no. 5, Mobleys argue that in order for them 

to determine where there was an acreage shortage, justifying an action 

against the defendants, it was necessary to have all of the crop acreage 

measured. 

Finally, the court's order did not include Delores Mobley or Mobley, 

Inc. and is therefore invalid. 

Moblevs raise only one issue for review, whether they discovered 

facts sufficient to constitute knowledge of fraud more than two years 

prior to the filing of the canplaint. 

Mobleys contend that discovery occurred November 1, 1977, when the 

ASC aerial survey was completed. The defendants contend that discovery 

occurred sometime before October 18, 1977, two years prior to the filing 

of the complaint. 

This Court has held that: 

"It is not enough for the plaintiff merely to say 

that he was ignorant of the facts at the time of 

their occurrence, and has not come into knowledge 

of them until within two years. 'He ~mst shm 

that the acts of fraud were comnitted under such 

circumstances that he would not be presumd to 

have knowledge of them, it being the rule that 

if he has "notice or information of circumstances 

which would put him on inquiry which if followed 

would lead to knowledge, or that the facts were 

presqtively within his knowledge, he will be 

deemed to have had actual knowledge of the facts."' 

Davis v. Hibernia S. & Society, 21 Cal. App. -- --- 

444, 132 Pac. 462; Lady Washington C. Co. v. Wood, 

113 Cal. 482, 45 Pac. 809; Truett v~hderdon~k 

120 Cal. 581, 53 Pac. 26.)" erri is v. OIMeara 

(1924), 71Mont. 1, 8, 227 P. 819, 822; Lasbv v. 

Burgess (1930) , 88 Writ. 49, 65-66, 289 P. lb28, 

1033. 

On June 28, 1977, Mobley received a letter from the ASC office 

stating that the acreage was not as he had thought. On August 29, 1977, 

Ylbley received the requested acre measurmt showing a discrepancy. 

M~bleys do not deny the knowledge of such information but assert that 

they did not have knowledge of such a nature as to foreclose them from 

pursuing this matter by suit filed October 18, 1979. 
Flhile Mr. Mobley was diligent in his efforts to ascertain the exact 

acreage, he had sufficient notice of information of ciramstances that 

put him on inquiry and therefore had actual knowledge of the facts. 

While mere suspicion may not constitute disco~~ery there is ample 

evidence in the record to support the District Court's determination of 

discovery within the meaning of the statute. 

"The law does not contemplate such discovery as 

would give positive knowledge of the fraud, but such 

discoverv as would lead a prudent man to inquiry or 

action. To hold that discovery must amount to absolute 

knowledge of the fact of fraud would be to render the 

statute practically inoperative, since such knowledge 

is rarely had before the facts are established by 

adjudication." 37 Am.Jur. -- Fraud & Deceit S 410, at 556. 

In Montana: 

"'Discovery' and 'knowledge' are not convertible terms, 

and whether there has been a discovery of the facts 

constituting the fraud within the meaning of the statute 

is a question of law to be determined from the facts proved." 

Kerrigan, 71 Mont. 1, 8, 227 P. 819, 822; Pay v. Divers 

(1928), 81 Jbnt. 552, 558, 264 P. 673; Lasby, 88 Monk. 49, 

65, 289 P. 1028. 

Therefore where the facts established point to discovery as defined under 

the statute, surnnary judgment is appropriate. 

The case is remanded and the District Court is ordered to dismiss 

the cause on the ground of fraud. The parties should not be precluded 

fram amending the complaint to include a cause of action for breach of 

contract. Liability and the facts of the case are not deemed proved by 

this opinion. The only issue decided herein is whether the Mobleys are 

precluded from proceeding on the theory of fraud based on the expiration 

of the statute of 1-imitations. 

' i Justice U 

We Concur: 

Mr. Justice Frank B. Pbrrison, Jr., dissenting: 

I respectfully dissent. 

The complaint in this action was filed October 18, 1979. For 

plaintiff to be barred by the statute of limitations, discovery 

would have had to occur more than two years prior to the date of 

filing. 

The ASC aerial survey was completed November 1, 1977. This 

survey indicated an acreage shortage. After completion of the 

survey Mobley called to discuss the discrepancy with Ed Khball who 

asked Mobley to wait until spring when the snow was off the 

ground. Kinhall stated that if there were any shortages they could 

be determined at that time and that Hall would "make it right". 

In my opinion there is a jury question wj-th reference to both 

date of discovery of the fraud and the question of whether 

Ximball's statmt to Mohley created an estoppel. If plaintiff 

was induced to refrain from filing based upon an assurance that any 

shortages would be taken care of, then defendant could well be 

estopped from asserting the statute of 1-imitations as a bar. 

I would reverse the order of the District Court granting 

summary judgment and remand for trial..